Credit Card Payoff Calculator
How credit card payoff works
Credit card interest compounds daily, not monthly. Your APR is divided by 365 and applied to your average daily balance. This is why a $5,000 balance at 22.75% APR costs ~$3.12 per day in interest — that's $95/month just to stand still.
Snowball vs Avalanche: which wins?
Mathematically, the avalanche method (highest rate first) always saves the most money. Psychologically, the snowball method (smallest balance first) builds momentum with quick wins. If you have one balance, as shown above, the method doesn't matter — you just need to pay as much as you can above the minimum.
Three ways to pay less interest
- Balance transfer card — move debt to a 0% intro APR card for 12–21 months. Some charge 3–5% transfer fees but the interest savings can dwarf the fee. Requires good credit (670+).
- Personal loan consolidation — exchange variable 22% credit card debt for a fixed 10–15% personal loan. Cuts rate in half if you qualify.
- Pay mid-cycle — making half your payment on the 15th and half on the 1st reduces your average daily balance, which is how interest is calculated. ~10% savings on the same monthly amount.
Minimum payment trap
A $5,000 balance at 22.75% with a 2% minimum payment ($100) takes 62 years to pay off and costs $23,000+ in interest. Always pay above the minimum. Even $50 extra a month can cut decades off your payoff.